Sucheta Dalal :L&T is no different from ACC (31 Dec 2001)
Sucheta Dalal

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L&T is no different from ACC (31 Dec 2001)  

BJP MP and Investor Grievances Forum (IGF)’s chief, Kirit Somiaya, had better watch out. Somiaya wants the market regulator to force Grasim to make an open offer to retail shareholders following its acquisition of 10 per cent of L&T’s equity. He says the induction of Kumaramangalam Birla and his mother on the L&T board amounts to management takeover and triggers the open offer. Somiaya realises that IGF cannot demand an open-offer for L&T without forcing Gujarat Ambuja Cement to make a similar offer to ACC’s retail investors. The ACC case was worse; Gujarat Ambuja’s 14.5 per cent stake was designed to be just a shade below the SEBI trigger for an open offer. The change in management control is more evident, since the Tatas had once claimed ownership of ACC. IGF’s belligerence about Grasim is in complete contrast to its silence over ACC. Can SEBI or the Bhagwati panel fiddle with the regulations so that the Birlas are forced to make an open offer but ACC remains unaffected? We can only wait and see.

Dangerous neglect

The Maharshtra State Road Development Corporation’s (MSRDC) 120 km Expressway is undoubtedly a national showpiece. It shows that India is capable of building modern Expressways on par with the best in the world. But maintaining it is a different matter altogether. It is not unusual to find an occasional cow, the odd tractor, a couple of cyclists or villagers trying to duck speeding cars to cross the 8-lane super-highway although it has signboards posted every few meters cautioning drivers that they are not allowed to halt or stop on the road. Then there are other hazards like segments of the road being cordoned off for repairs without adequate warnings, or water tankers that are planked on the fast lane to hydrate plants on the median divider. But what really takes the cake is to exit from a tunnel only to be stopped short by a shepherd leisurely crossing the Expressway with a flock of sheep. It is time that the MSRDC learns a few sharp lessons. Also, a Rs 1,630 crore project cannot save the tiny cost required to employ a crack security system to patrol the Expressway and initiate tough action against anyone who endangers traffic by trespassing. Only then can the Expressway operate in the way it is meant to and not fall into disrepute and disrepair.

Journalistic plants

The quality of journalistic ethics and fake news reports is apparently worrying several developed countries too. The last few weeks have seen a couple of Indian business journalists exit under a cloud in connection with Ketan Parekh’s generosity towards them. We now learn that FM of EU have also managed to include the role of the media in a crackdown on insider trading. The Financial Times of London reports that despite protests from publishers and some dilution of norms, the EU plans on powers to prosecute journalists who publish misleading information, except if they can prove that they did not know that the information published by them was misleading. It is something the needs to be introduced in India too.

Tailpiece: At a little over 50, Bill Clinton had completed two terms, Tony Blair was young enough to have a child in office. But when it comes to India we have had more than one PM celebrating his 78th birthday and above in office. The emphasis on age before ability percolates down to the selection of regulators and other functionaries too. I am told that a certain candidate is being eliminated from the race for SEBI chairman, despite his obvious competence, because he is too young at almost 52! The decision makers prefer to choose between a past and present SBI chairman. Clearly, the fanatical adherence to age/seniority based hierarchy extends to the private sector as well, where the big guns follow a complex protocol which decide trivial things such as who comes to a telephone line first, or who meets the other at his office and which appointments are fixed at neutral locations such as swanky restaurants.

-- Sucheta Dalal